bankruptcy

Sears Canada pensioners demand shortfall be paid off first

The law firm representing Sears Canada pensioners has issued a letter to the agency overseeing the liquidation and all other creditors, asking that the pension deficit be paid first and as soon as possible, as money from liquidation sales becomes available.

“Our clients . . . are entitled to first priority recover for those amounts,” according to the letter, from Koskie Minsky’s Andrew Hatnay, citing a prior Supreme Court of Canada decision.

The letter is addressed to the monitor assigned to the case, FTI Consulting, and to the service list, which includes lawyers representing every party to the insolvency.

If Hatnay’s position is accepted by the creditors lining up to be paid, the pension’s $270-million deficit would be paid first, although pensioners would not receive other benefits – dental benefits and life insurance benefits, which were discontinued at the end of September.

If the other creditors refuse to allow the pensioners to be paid first, the matter could end up before the court, according to Hatnay.

The legal letter was sent Thursday, a day after Innovation Minister Navdeep Bains said the federal government will consider legislation to protect employees’ pensions when a company goes bankrupt.

While there’s no plan for the government to introduce legislation at the moment, he said it will carefully examine two different private member’s bills on the subject, put forward by a New Democrat MP and a Bloc Quebecois MP. (Source: Toronto Star)

Tough Times for Sears and CRA

Sears Canada workers are feeling confused and angry after learning on Tuesday that the retailer plans to close its remaining 130 stores.

June 23, 2017

If Sears gets court approval, it would start liquidating the stores as early as Oct. 19, putting the retailer out of business and about 12,000 employees out of work.

“Many of us feel frustrated, anger, betrayal,” a Sears manager told CBC News in an email on Tuesday. He and another employee interviewed asked that we not publish their names because they still work for the retailer and fear retribution.

“People don’t know what to do,” said the manager about staff at his location. “Many people went home already as they were physically upset and needed some personal space.”

A Sears memo sent to staff Wednesday said workers will lose their jobs as early as within the next few days, but that some will stay on for a few months. It also explained that employees will lose their benefits as soon as they’re terminated. (Source: CBC)

Meanwhile, The federal government appears to be doing away with a controversial tax policy interpretation that would have seen employees taxed for discounts they get at work.

Amid a growing controversy, a spokesperson for National Revenue Minister Diane Lebouthillier said Wednesday that the government will pull the new wording at the heart of the debate from the Canada Revenue Agency website.

Spokesperson John Power said the CRA made the original decision to change the wording, not Lebouthillier.

“This document was not approved by the minister and we are deeply disappointed that the agency posted something that has been misinterpreted like this,” he said in an emailed statement.

The CRA will hold an internal review on the wording change, which will be followed by a consultation on the issue with industry groups, Power added.

The former wording in the employer’s guide on the issue of employee benefits was to be reinstated as early as Wednesday afternoon. (Source: Toronto Star)

Sears Canada to close 59 stores, lay off 2,900 in restructuring

Sears Canada plans to close 59 stores and eliminate 2,900 jobs across the country as part of a court-supervised restructuring process.

Shares in Sears Canada were halted Thursday morning after the retailer applied for and was granted protection from its creditors under the Companies’ Creditors Arrangement Act — the law that covers insolvency proceedings.

The move gives the retailer 30 days to restructure itself, which includes $450 million in debtor-in-possession financing to fund the company while it restructures, a process that will include closing dozens of locations and laying off thousands of workers.

The chain will axe 20 full Sears stores, 15 Sears Home Stores, all 10 outlet stores and 14 Sears Hometown stores — roughly one-third of its current retail footprint.

All other Sears locations will remain open, the chain said, and the company “plans to continue to operate a large number of stores, continue to maintain significant employment, and to service its customers across Canada,” Sears said in a court filing.

About 500 office positions at the company were to be eliminated immediately. The remainder of the job losses will come as Sears closes stores. As of May 30, the company employed approximately 17,000 people, with 10,500 in part-time positions and the rest working full-time.

Trading in the shares was halted before the Toronto Stock Exchange opened on Thursday, pending news. Minutes later, Sears Canada announced its plan in a press release. (Source: CBC)

CHCH TV cancels tonight’s newscast; station future uncertain

CHCH news staff is waiting to find out the fate of their station after being told there will be no 6 o’clock newscast tonight.

An announcement to staff is expected at 4 p.m., by email, sources inside the CH newsroom say. The fear is the station is shutting down or being dramatically reduced.

Employees began asking questions this morning after money was unexpectedly deposited in some employees’ bank accounts. One staffer — who does not want to be identified — says the amount was equal to about two paycheques.

The station is owned by Channel Zero in Toronto.

One staffer, who didn’t want her name used because she was clinging to the hope she might still have a job on Monday, said the mood is “awful.”

As of 2:45 p.m. people were still optimistically working to file stories, she said. (Source: Hamilton Spectator)